A day after a colourful grand opening of the first phase of Hawassa Industrial Park (HIP), crucial and clear-cut instructions were passed by Arkebe Oqubay (PhD), special adviser to the Prime Minister with a ministerial portfolio, aiming to further place HIP in a stronger grip.
This happened at a Chief Executive Officer (CEO) Forum held at Sheraton Addis Hotel, on June 21, 2017.
The Forum, chaired by Arkebe, was attended by the Tenants’ Association at HIP that is a representative body of investors in the Park, partners and CEOs of the large government agencies.
During the Forum, the representatives and leaders of companies in the Park and CEOs of governmental agencies discussed areas of concern that slows down efficient manufacturing, transactions and exports.
Many concerns were raised in a variety of salient areas of services covered under the One Stop Shop (OSS).
The OSS lets investors get quick services through the integration of the main government institutions delivering vital services for the investors in areas such as finance, logistics, telecommunication, labour and employment, customs and taxation and trade licensing.
With determination, Arkebe was instructing the concerned governmental bodies and members of the Tenants’ Association with specific orders to solve the issues raised.
The Forum also made arrangements about its future, to ensure a successful park that generates one billion dollars annually when it becomes fully operational.
Finance-related issues were among the significant concerns that took a long time in the discussion.
One of the representative of PVH echoed the slow process in the state banks as a bottleneck for the investors.
“You need to be ahead of us, not behind us,” he reminded the service providers.
Representatives of the investors requested, among other things, for clearer and swift banking services to make the import-export activities efficient.
They reported that miscommunication among the state banks are slowing down the services since the Commercial Bank of Ethiopia (CBE) at the OSS refers investors at Hawassa to Addis Abeba.
Arkebe stressed inter-agency quarrels have to be addressed for better synchronisation among the state banks for quality investment services.
“Within seven days, the National Bank of Ethiopia (NBE) must open an office inside the park or delegate CBE – which has already set up an office in the park – to act on behalf of it,” he urged.
The investors have also requested for video-conference facilities and a fourth generation (4G) network service at the Park, which was an assignment for the state telecom monopoly, Ethio telecom.
Moreover, the investors requested more conducive financial support from the government. Currently, all investors at HIP have either self-sponsored projects or equity raised from foreign sources.
The investors urged the Ethiopian government to design a more favourable approach to equity-debt ratio requirements, mentioning that covering 70pc of their project is too much for them.
Arkebe made it clear that the issue is waiting for a decision from NBE and promised them that he would follow up and make an announcement as soon as possible.
Furthermore, logistics problems and trade facilitation bottlenecks were discussed in the Forum and agreed upon to be solved by support from the investors.
Arkebe admitted the government’s weakness in the logistics, emphasising for the requirement of investors’ involvement to change the scenario.
“Bring us the best experience you know in Asia, and we will adopt it,” Arkebe said.
Sprawling on a 410,000sqm plot of land at the gate of Hawassa, the capital of Southern Nations,Nationalities & Peoples’ Regional State (SNNPR), the Park has its own clinic, police station and fire and emergency services centre, making it a mini-city.
Upon full capacity production, 50 containers will go out daily from the HIP compound, carrying its outputs to reach the global market.
While the industrial park is planning to expand more, it was reported that it faced a challenge from workers who claim they are unhappy because of small wages. Workers were reacting aggressively by grouping themselves which was driven by misconceptions, explained a member of the Forum.
“The amount of salary does not matter more than the job opportunity itself,” said Arkebe on June 19, 2017, at Hawassa during a press conference. And he indicated that salary increments would come along with profits made.
“Let the workers be informed accurately and train them in their mother tongue about their benefits,” he directed the Ethiopian Investment Commission (EIC).
He also advised that if the tripartite modality composed of employers, workers and the government as stated in the Industrial Parks Proclamation is translated into reality, it could be one way of handling labour issues better. And the wise management of human relations with a better understanding of workers’ culture was also advised.
Currently, many workers claim their salary is meagre, receiving an average net of 1,000 Br, which is below the minimum wage of civil servants.
“The salary has never attracted me at all; I work because I only want to learn the technicalities of making suits,” said a young worker at one of the textile factories.
The salary is not determined by the investors, according to Vishal Bist, business head at Silver Spark Apparel Ethiopia Plc, a subsidiary of Raymond Group, an Indian branded fabric and fashion retailer.
“It is the global economic force that balances the salaries of workers. It will rise when the country grows more,” he told Fortune.
During the grand opening ceremony, a cornerstone was also laid down for the second phase of HIP.
JPET, a thread producing company from China, is among those companies planning to build new sheds in the second phase.
The company produces threads to feed PVH Corp, one of the leading American clothing producers settled at HIP, and other textile factories in the Park, boosting vertical integration of HIP.
The government also has additional plans of building specialised, vertically integrated industrial parks as milestones to reach the country’s vision of becoming the manufacturing hub of the continent by 2025.
Now that production has officially started and swift decisions have been made over bottlenecks in main areas, HIP is expected to move further to reach its core missions – export and job creation by attracting investors.
Currently, there are 18 companies situated at HIP, located 277km South-West of Addis Abeba. All the factories together produce many types of textiles and apparels ranging from socks, underwear and shirts up to suits.
Furthermore, on his official Facebook page, Prime Minister Hailemariam Desalegn stated that he had a chance to talk to the investors at the Park’s site and that he promised them to address all of their concerns.
The premier also explained that the government has relevant experience and knowledge from HIP that will help to develop all the other parks across the country with more efficiency and quality.
The inauguration of the Park comes at a time where concerns over the sustainability of the environment have become a talking point in main social media platforms.
HIP uses a Zero Liquid Discharge (ZLD) system that has been developed and controlled by Arvind Evisol Plc for two years.
The automated system, which was launched by Hailemariam during the grand production inauguration ceremony, is reported to treat and avoid liquid discharges of eight million litres of liquid waste and three million litres of sewage daily released by people who work inside the Park.
On the same day as the inauguration ceremony, Arvind and the Industrial Parks Development Corporation (IPDC) signed a memorandum of association to expand the liquid discharge technology to other parks in different places in Ethiopia.
Currently, the government has planned to raise the number of industrial parks to 15 in the next three years from the current three which are operational.
The development of these parks is a necessary step to quadruple the manufacturing jobs to two million and exports to 20pc of the Gross Domestic Product (GDP) within ten years, according to the target of the government.
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